The news was confirmed by the organisation, Genesis Prize Foundation, which has announced the honouree in November, last year.
The organisation's website stated, "The Genesis Prize Foundation (GPF) was notified by a representative of Ms. Portman that 'Recent events in Israel have been extremely distressing to her and she does not feel comfortable participating in any public events in Israel' and that 'she cannot in good conscience move forward with the ceremony'."
Following the decision, the organisation decided to cancel its annual ceremony which was scheduled for June 28.
According to the organisation's website, it honours "extraordinary individuals who serve as an inspiration to the next generation of Jews through their outstanding professional achievement, commitment to Jewish values and to the Jewish people".
"Portman was born in Israel and, after moving to the US as a child, retained a close connection to her Jewish and Israeli roots. In 2015, she directed 'Tale of Love and Darkness', a Hebrew-language film made in Israel and based on the novel by an Israeli writer Amos Oz. Portman also played a leading role in this picture", read the statement.
The foundation added, "However, we are very saddened that she has decided not to attend the Genesis Prize Ceremony in Jerusalem for political reasons. We fear that Ms. Portman's decision will cause our philanthropic initiative to be politicized, something we have worked hard for the past five years to avoid."
Genesis Award is one of the most prestigious awards in the country, almost equivalent to the Nobel Prize, according to The People.
Portman has been vocal about her criticism against Israeli Prime Minister, Benjamin Netanyahu. In a 2015 interview with the Hollywood Reporter, she had said, "I'm very much against Netanyahu. Against. I am very, very upset and disappointed that he was re-elected."(ANI)